Third Ordinary Meeting of the Conference of the Parties to the Convention on Biological Diversity (COP 3)

Main Information

Title

A tax incentive for protected areas and water supply areas in Brazil

Description

Some states in Brazil have large-scale land-use restrictions due to protected areas and water supply areas, and are at an economic disadvantage because of the constraint on development. Furthermore, the federal government in Brazil redistributes the ICMS (value-added tax) to the country 26 states on the basis of value added generated. As a result, states with many protected areas receive lesser allocations from the federal government, despite the environmental benefits they provide.

In response, an Ecological ICMS has been introduced in four states, which provides extra fiscal compensation for protected areas and/or water supply sources. The initiative for the Ecological ICMS came from the Parana state, and in its implementation involved participation by a range of organisations, including federal, state and municipal bodies and NGOs. Since 1992, an annual review has taken place to improve the project so that it better meets its objectives.

The results of the measure include an increase in the number and size of protected areas, an increase in revenue for participating states, reinvestment of revenue into protected areas and the adoption of the Ecological ICMS by other states.